Pan Orient Energy Corp.
TSX VENTURE : POE

Pan Orient Energy Corp.

November 21, 2008 17:21 ET

Pan Orient Reports Third Quarter Income of $9.1 Million

CALGARY, ALBERTA--(Marketwire - Nov. 21, 2008) -

NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Pan Orient Energy Corp. (TSX VENTURE:POE) is pleased to provide highlights of its third quarter results in conjunction with the Company's 2008 3rd quarter financial statements and associated management's discussion and analysis which can be found online at www.sedar.com.

HIGHLIGHTS

- Third quarter of 2008 oil revenues increased to $43.2 million, up 22% from Q2. Oil revenues have increased over tenfold from 2007 levels.

- Q3 2008 net income of $9.1 million, representing Pan Orient's highest quarterly income in its history.

- September 30, 2008 positive working capital of $37.7 million along with zero debt.

- $17.4 million of funds flow from operations in Q3 2008, representing cash flow from operating activities, up from $10.9 million in Q2 2008.

- Q3 2008 Thailand oil production averaged 7,152 bbl/d gross (4,291 bbl/d net to Pan Orient), despite downtime relating to producing wells being shut-in during the drilling of adjacent development wells from the same surface pad. October 2008 production averaged greater than 11,000 bbl/d gross (6,600 bbl/d net).

- Pan Orient reaffirms its targeted 2008 exit rate of 15,000 bbl/d gross (9,000 bbl/d net to Pan Orient).



Selected Quarterly Information
----------------------------------------------------------------------------
2008 2007
----------------------------------------------------------------------------
Q3 Q2 Q1 Q4 Q3 Q2
----------------------------------------------------------------------------
($000s unless indicated)

Revenues
Oil - Thailand 43,241 35,486 32,498 15,435 4,214 2,812
Royalties - Thailand (2,808) (2,349) (2,254) (931) (242) (265)
Interest - Canada 209 93 265 234 118 98
----------------------------------------------------------------------------
40,642 33,230 30,509 14,738 4,090 2,645
----------------------------------------------------------------------------

Expenses
Stock-based compensation 214 446 296 1,487 235 237
General & administrative 1,777 1,378 885 1,086 764 764
Foreign venture expenditures 619 - - - - -
DD&A 5,000 2,955 3,086 1,185 1,566 1,164
Operating & transportation 1,939 2,066 1,686 1,065 411 866
Non-controlling interest (104) (149) 12 457 (23) 4
Foreign exchange (gain) loss (931) 696 (205) (473) 1,079 807
Current income tax 11,041 8,262 6,360 4,646 - -
SRB 8,196 9,601 11,335 - - -
Future income tax increase
(reduction) 3,833 (483) 3,631 (1,414) (28) 40
----------------------------------------------------------------------------
31,584 24,772 27,086 8,039 4,004 3,882
----------------------------------------------------------------------------

Net income (loss) 9,058 8,458 3,423 6,699 86 (1,239)

Per share basic ($) 0.20 0.19 0.08 0.15 0.00 (0.03)
Per share diluted ($) 0.19 0.17 0.07 0.14 0.00 (0.03)

Average production, net
(bbl/d) 4,291 3,894 4,604 2,320 722 501

Capital expenditures (1) 13,627 6,686 3,581 6,524 9,035 5,277
Funds flow from
operations (2) 17,366 10,947 10,612 7,942 2,455 1,014
Shares outstanding (000s) 45,650 45,770 45,247 45,218 41,635 40,135


----------------------------------------------------------------------------
2007 2006
----------------------------------------------------------------------------
Q1 Q4
----------------------------------------------------------------------------
($000s unless indicated)

Revenues
Oil - Thailand 1,573 431
Royalties - Thailand (119) (52)
Interest - Canada 125 206
----------------------------------------------------------------------------
1,579 585
----------------------------------------------------------------------------

Expenses
Stock-based compensation 642 518
General & administrative 550 711
Foreign venture expenditures 40 126
DD&A 790 444
Operating & transportation 546 535
Non-controlling interest (128) (29)
Foreign exchange (gain) loss (88) (201)
Current income tax - -
SRB - -
Future income tax increase (reduction) (70) (1,072)
----------------------------------------------------------------------------
2,282 1,032
----------------------------------------------------------------------------

Net income (loss) (703) (447)

Per share basic ($) (0.02) (0.01)
Per share diluted ($) (0.02) (0.01)

Average production, net (bbl/d) 344 118

Capital expenditures (1) 1,390 4,250
Funds flow from operations (2) 442 (786)
Shares outstanding (000s) 40,057 40,057


(1) Not including acquisition of Indonesian companies.
(2) Refer to "non-GAAP Measures" for calculation


Production and Corporate Netback
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
2008 2007 2008 2007
----------------------------------------------------------------------------

Oil revenue ($000s) 43,241 4,214 111,225 8,598
----------------------------------------------------------------------------

Average daily production (bbls/d) 4,291 722 4,263 524
----------------------------------------------------------------------------

Operating netback ($)
Realized oil price 109.54 63.44 95.22 60.14
Royalties (7.11) (3.64) (6.34) (4.38)
Operating expenses (2.30) (3.70) (2.31) (10.25)
Transportation expenses (2.61) (2.49) (2.56) (2.50)
----------------------------------------------------------------------------
Total operating netback 97.52 53.61 84.01 43.28
----------------------------------------------------------------------------
Interest income 0.53 1.77 0.49 2.38
General & administrative expenses (4.50) (11.50) (3.46) (14.54)
Foreign new venture expenditures (1.57) - (0.53) -
Realized foreign exchange 0.75 (6.93) (0.27) (3.22)
Special Remuneratory Benefit (20.76) - (24.94) -
Income tax (27.97) - (21.97) -
----------------------------------------------------------------------------
Total corporate netback 44.00 36.95 33.33 27.90
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.

This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.

45,568,366 common shares issued

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pan Orient Energy Corp.
    Jeff Chisholm
    President and CEO
    (403) 294-1770
    or
    Pan Orient Energy Corp.
    Jason Bednar
    Vice President Finance and CFO
    (403) 294-1770
    Email: jason@panorient.ca